Judgment:
1. The ld. Advocate appearing for the Appellant submitted that the duty liability was not disputed and the assessee had voluntarily discharged the demand much before that was raised by an order of adjudication.
According to him, visit by the Excise Authority to the factory premises was made on 21.03.2004 and allegations made by them. The appellant came forward to deposit the duty liability on 05.10.04. Show cause notice was issued on 08.02.2005. Order of adjudication was passed on 08.06.2005. Without having demand on 05.10.2004 the assessee was not liable to any interest. So also he submitted that there was no deliberate intention nor willful breach of law resulting with evasion of duty for which penalty of Rs. 1,69,935/- (Rupees One lakh Sixty nine thousand and Nine hundred thirty five only) imposable. He submitted that for the inadvertance, allegations were made and there was no material to form basis of charge. Therefore, the appellant may be exonerated from penal consequence of law.
2. Contention of the Appellant was repelled by Revenue on the ground that had the Department not detected the evasion, the assessee would have escaped unnoticed. Therefore, the ld. Commissioner (Appeal) has passed appropriate order dismissing appeal of the assessee before him.
No interference to such order is desirable.
3.2 The fact of detection and date of deposit of duty remained undisputed by both parties. Therefore, levy of interest prematurely without a demand is uncalled for. Only after demand is crystalised and there was default by the assessee to deposit the same interest as a consequence of default follows. But in this case that is not the situation. Therefore, levy of interest calls for waiver.
4. So far as penalty is concerned the allegation was well founded and uncontroverted by the Appellant. For this reason the Appellant came forward to discharge the duty liability on 05.10.04 i.e. much before the order of adjudication was passed. Order of adjudication was passed on 08.06.2005 and by that time duty liability was discharged. However looking into gravity of the breach of law and also cooperative attitude of the appellant and without any finding relating to contumacious conduct levy of penalty to the extent of Rs. 1,69,935/- would be harsh.
The Advocate for the appellant also submitted if at all there was penalty, that should have been limited to 25% of the duty liability according to Section 11AC of Central Excise Act, 1944. Considering totally of facts and circumstances of the case, to discourage breach of law as a preventive measure, imposition of token penalty of Rs. 10,000/- (Rupees Ten thousand only) would meet the end of justice. In the result, the appellate order passed by the ld. Commissioner (Appeal) is modified to the extent indicated above and the appellant gets partial relief allowing the appeal partly.